The question often arises with business owners and CEOs of startups about how to know when to hire a CFO.
Entrepreneur Magazine had some good, overall tips about hiring a CFO and the differences compared to a bookkeeper or controller. Below are some of the most important points from the article.
Bookkeeper: “Bookkeepers are responsible for recording all company transactions: orders, invoices, purchases, bills, checks and payments. They perform various processes and procedures to make sure that what they enter is complete and accurate.”
Controller: “A controller creates timely and accurate financial statements--such as balance sheets, statements of profit and loss and cash-flow statements--based on the transactions entered for each accounting period. The controller is a trained accountant with formal education and sometimes certifications. It's his or her job to make sure the accounting department is on top of entries and that statements adhere to Generally Accepted Accounting Principles.”
CFO: “A CFO looks at the bigger picture. This executive makes sure that the systems, processes and people are in place to produce accurate financial information (reports, dashboards, key performance indicators, etc.) so that the owner of the company can make better decisions. Put simply, a controller looks at the past, while a CFO looks to the future to help figure out how to reach the company's goals. At the same time, a CFO is responsible for minding daily cash flow.”
Signs that you need a CFO: Constant worries about cash, losing sleep about the where the business is headed, spending too much time on unproductive tasks like what bills to pay (accounts payable or AP), unable to generate or interpret financial statements, falling profits, low margins, etc.
“However you proceed, finding a CFO you can trust is a wonderful thing. You can delegate a lion's share of the financial headaches to this person and know that he or she has your back. And that, my friends, will let you sleep soundly for the first time in years.”